Russia, China announce progress on $4 bn fund

Russia and China on Saturday firmed up plans to raise capital for a joint $4 billion investment fund as a top Chinese official, who is set to be the next premier, visited for talks. Progress on a joint investment fund was announced at an economic forum attended by Chinese Vice Prime Minister Li Keqiang and Igor Shuvalov, the influential first deputy of Russian Prime Minister Vladimir Putin, who will return to the Kremlin for a third term as president on May 7. \"The creation of the Russian-Chinese investment fund by the Russian Direct Investment Fund and China Investment Corporation will become an example of effective cooperation in the economic sphere between Russia and China,\" said Kirill Dmitriyev, general director of Russia\'s investment fund. The Russian fund and the Chinese sovereign wealth fund will each contribute $1 billion (755 million euros) to the joint venture, while the rest is expected to come from Chinese investors, Dmitriyev said in a statement, adding the fund would become operational by the end of June. Machine-building, agriculture, transportation, and timber processing are among the sectors to be targeted for investment, with 70 percent of the resources directed to Russia and 30 percent to China. Plans to establish the fund were first announced late last year. Li, who is tagged to take over as premier from Wen Jiabao, on Friday held separate talks with outgoing President Dmitry Medvedev and Putin. Russia\'s economy is heavily dependent on oil and gas, and analysts say that Medvedev\'s heavily-publicised modernisation drive during his four years in office has had limited success. During the economic forum Russian and Chinese companies signed a total of 27 commercial agreements and contracts, the Russian economic ministry said. China\'s official Xinhua news agency, quoting Li, said the deals were worth $15 billion. Representatives from the Russian economic ministry could not immediate confirm the figure or provide their own estimates.